Indian Economy : Key Expectations From New Government

• Improvement in fiscal management/public finances via disinvestments

• Increased focus on infrastructure spending especially power and road/highways.

• Thrust on agriculture and rural development 

• Financial sector reforms like increasing FDI in retail and insurance sector

• Increased focus on education and healthcare

• Providing ample liquidity to corporates and individuals at affordable rates
it is believed that the above factors will help in bringing fresh capital into the country in terms of FDI, FII flows and ECB flow

This is the first election after 1984 when a single party has won more than 200 seats: This outcome has paved the way towards a stable UPA government at the centre, which would be crucial for the execution of progressive policies. The government would be aggressive on reforms (banking and pension) and divestment of government’s stake in PSUs, which would help in controlling the fiscal deficit.

Smooth governance The formation of a new government without Left parties influence would eliminate the major barriers in policies like allowing foreign investment in sectors such as insurance,retail and aviation, which earlier the communist parties objected to.

Implementation of policy reforms and divestment of government’s stake in Public Sector Units would not only help in controlling the fiscal deficit but would help in increasing the governments spending on infrastructure, which would attract more FDI and increase
the visibility of the India growth story to the international community.